that the positive federal fiscal impact in California is very small, at the same time that a very much larger positive federal impact is found for the nation as a whole. California is simply too different from other states to permit extrapolating from its experience the national federal impact of immigrants. In fact, further exploration reveals that immigrants in California pay far less federal taxes than do those elsewhere, perhaps because they have substantially less schooling. Calculations show that, whereas immigrants in California pay $2,850 per capita in federal taxes, immigrants elsewhere pay $3,824, or nearly $1,000 more. At the same time, immigrants in California receive benefits costing $2,764, whereas immigrants in the rest of the country receive benefits costing $3,022, or about $360 more. This difference in benefits doubtless reflects the older age distribution of immigrants in the balance of the country, whereas the difference in taxes reflects both the age difference and the education difference. Thus, California immigrants have a federal fiscal impact of +$86 per capita, and immigrants in the rest of the country have a federal impact of +$802.

The extrapolation done in the previous chapter controlled for regional heterogeneity by taking ethnic composition into account. However, it turns out that this is not an adequate control, as illustrated by the following figures for federal income taxes paid by ethnic groups in California and in all other states combined:

Immigrant Ethnic Group


Other States










It is also possible to calculate the net fiscal impact by state from the data at hand, and the results are quite striking, as shown in Table 7.4. Whereas the average immigrant, plus her U.S.-born young children, has a negative impact of $369 for the United States as a whole, the total impact is actually substantially positive for New Jersey and is essentially zero for the immigrants in all other states besides California and New Jersey combined. For California, however, it is -$1,313. In California, compared with the United States as a whole (including California), impacts are $400 to $500 more negative at both the state and local and the federal level, adding up to about $950.

The figures for aggregate, rather than per capita, fiscal impacts are also striking. As reported earlier, the aggregate fiscal impact of immigrants and their young U.S.-born children amounts to -$11.4 billion. But the impact for California alone is -$14.3 billion, whereas New Jersey contributes +$2.4 billion and the other states contribute +$0.5 billion. In other words, California alone accounts for the entire national negative fiscal impact of immigrants (at the combined federal and state and local levels)—and then some. Of course, immigrants in some of the states that have been lumped together in ''other" may also be costly.

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